BY EDWARD THEOPHILUS
When the
country was in a difficult time after ending the civil war, the Rajapaksa
regime was given strong support by China and Russia, if a situation to let down
Sri Lanka arose, both countries promised to exercise their power, most probably
veto power against the international attempts to condemn Sri Lanka. India
was also concerned about the international developments against Sri Lanka which
might later direct to India too. However, the election campaign in 2015 was
manipulated to a hidden motivation of international forces against China, but
the frustrated domestic politicians got caught to international forces with
knowing or without knowing of undisclosed hidden objectives of foreign
forces. The politics of the domestic
front to defeat the Rajapaksa regime was formed by an unholy collision with
contradictory hidden objectives, and they used to criticize China against the
Rajapaksa regime in the political platform.
That was the mistake that the yahapalana regime was done during the
election period in 2015.
Current
Sri Lanka’s economy has gone to backwardness in many areas such as foreign
assets, international trade, employment generation, inflation, interest rate,
poverty, and many other areas. The live television shows indicate that people
were demanding the government to reduce inflation and reliefs for day to day difficulties. The president and the prime minister of the
current regime need to tell the truth to people. The Public might disappoint on
the condition created by the COVID pandemic and they should understand that the
president or the prime minister cannot order economic growth or to reduce the
prices of goods and services or to away the corona pandemic they are an effect
on the market process.
The
solution to this backwardness is increasing the pace of economic growth and
current Sri Lanka needs injecting the US $ 100 billion or more to the economy
during the next ten years, however, the economy of the country has no such a
capacity and the COVID pandemic has flattened the incoming flow of foreign
exchange to the country. Many political reforms, which were taken after 1980
increased spending, which was covered by corruption in previous regimes and no
gains received from such spending.
China
provides about the US $ 400 billion foreign assistance to 140 countries it is
obvious from current international aid statistics that Sri Lanka cannot get a
large sum of cash aid from China during the next 10 years, but Sri Lanka can
share this requirement with China using non-cash supports opening the country
to Chinese investments in private business and the government sector.
Many cash
assistance needs to pay back and it would impact the repayment capacity of the
country. The attraction of cash and
another form of loan for investments have a positive impact on debt services.
The policymakers of Sri Lanka need to understand how a country could get
supports from China without going into a debt trap. There are many techniques,
which could be used to avoid the debt burden to the country, however, Sri Lanka
needs to get assistance from China without gaining debt burdens.
Sri Lanka
urgently needs Chinese helps for several vital areas. Tourism development based on cultural and
religious-based would enhance foreign exchange earning quickly, however, there
are several barriers in the area. When
there is a feeling about the risk of movement, the motivation for travel may be
a downward trend. To deal with this trend the government needs to obtain
support from the Chinese government to encourage tourists from China to Sri
Lanka.
Tourism
has identified as an effective to foreign exchange earnings and employment
generation, nevertheless, the tourism sector suffered from constraints of
planning and investments because the policymakers are lacking knowledge and
skills in planning sectoral policies to competitively improve the
industry. The tourist arrivals from
China should be annually increased to 5 million. The current economic trend in the region
shows that this is an achievable target with many improvements in the sector
with supports of China, the industry needs direct injections of ideas to
attract people and investment should be cooperative with China sharing the
benefits to both sides. To attract tourists from China and the inflow of
investment need changes in the style of business management.
The
government may be looking for cash injections like how did Gorbachev seek cash
when the Soviet Union collapsed in the early 1990s, it would not happen. Sri Lanka needs broad support from China to
make a positive impact on society.
Sri Lanka
requires tourism sector employees with the ability to speak in the Chinese
language. Chinese tourists are not concerned about the English language and
want to converse with their language.
Although Sri Lankans treat English as superior Chinese tourists don’t
care about it. Educating the Chinese language to the Sri
Lankan tourism sector employees is an essential condition to attract tourists
from China while expanding tourism infrastructure, which needs large scale
hotels as well as many medium-sized and small hotels. The revenue of tourists
is the major factor in selecting residence and usually people tours once in
three years or four years. Chinese
tourists like the place where they visit, if places have an environment with a
Chinese style speaking in Mandarin language, opportunities with light gambling
services, leisure activities, good security, excellently clean services in a
residential environment. Many residential services in the tourism industry in
Sri Lanka have no clean environment.
Sri Lanka
has thousands of religious places related to all religions and they need to
organize and develop as shrines and worshiping places to domestic and foreign
tourists. Many religious administrators have no clear understanding of the
management of places the management of the environment, religious programs and
finance, and many matters. The most significant characteristic of Shinto
Buddhism in Japan is to maintain a very clean attractive place to visitors of
the shrines bring them the second time.
It needs training in religious administrators. The best example for this is Japan how they
use shrines as an attractive place for tourists. Although these activities are costly, they
will generate a massive volume of employment for the country.
The other
essential requirement is the abolition or reduction of the charges for a
tourist visa to US$10 for 30 days period because Sri Lanka needs to maintain
the sustainability of the industry rather than exploiting tourists. As a result
of radical changes in the tourism industry, the country can increase tourist
arrivals from China to five million annually during the next ten years.
Without
cash injecting into the economy of Sri Lanka, China can encourage its business
community to invest in Joint ventures in Sri Lanka. The concept of joint ventures directly helps
Sri Lankans to learn business management and the application of
technology. The process should not be
limited to a specific area of the country.
There are
potentials to develop joint ventures for agriculture, industry, construction,
and services, and the investment ratio in a joint venture should be limited to
or specified to a ratio identified by the government. Chinese investors can
offer shares of the business to Sri Lankan and convert the business project to
joint ventures. This type of investment
would not affect the debt level of the country and the government’s role is to
protect such ventures and liberalize to control the repatriation of earned
profits.
The
current government of Sri Lanka has no intention to make serious damage to the
port and industrial park developments initiated during the Rajapaksa regime
before 2015. It is quite clear that Sri Lanka would not gain any advantage
through impediments enforcing against Chinese investments. The country needs
investments from China and India. Both countries could offer supports to Sri
Lanka. Whichever the political party in
Sri Lanka needs understanding that short-term political rhetoric should not mix
with long-term economic development policies.
China has
effectively and massively engaged in economic development in the Asian region
without involving political or ideological differences. Chinese investments in Korea, Taiwan Vietnam,
Singapore, Malaysia, and the Philippines positively impacted economic
development and similar way Sri Lanka must allow Chinese investors to engage in
economic activities. In this way, Sri
Lanka should allow Chinese banks to open branches in Sri Lanka because the
baking system in the country has no sufficient capital to finance for foreign
investors. A massive volume of lending
capacity of trading banks in Sri Lanka stuck with non-performing credits to
government and private sectors, the saving capacity of Sri Lanka is not
sufficient to maintain required capital adequacy to make massive quantum of
investment finance. The basic incentive
to attract Chinese private investments is allowing Chinese banks to open
branches in Sri Lanka and allow such branches to attract deposits from Chines
people from all over the world. This strategy would massively increase foreign
exchange reserves supporting to increase and stabilize the international value
of Sri Lanka Rupee.
When the
market economic system began in 1978, Sri Lanka’s government allowed foreign
banks to open branches, despite the opposition directed by domestic banks for
paying interest on current account balances, liberalized credit conditions of
foreign banks, many American and European bank branches were opened but they
left the country after July riots in 1983.
Now Sri Lanka’s war is over, and there is a good environment for
investments despite the opposition to Chinese investments.
Do
Chinese investments limit to industrial activities? This is a critical question because of
political opinion concerns that investments in agriculture and plantation
industry should be in the hands of Sri Lankans, however, agriculture especially
the production of rice and agriculture-based industries such as sugar
production and many others desperately need modernization with new technology,
product invention and cost minimization with improved product qualities.
Agriculture and plantation industry alone could be double the production and
product quality if the right innovations and qualities applied, therefore, Sri
Lanka could massively improve agriculture and plantation sectors with Chinese
investments and need opening these two sectors for Chinese investment as joint
ventures.